Bringing together employment and skills services in urban areas could result in a £420m boost to the national economy, according to local government leaders.

The Local Government Association (LGA) says cities can ‘level up the country, grow an economy fit for the future and tackle the climate crisis if they have the right resources and extra powers.’

In an open letter to levelling up secretary Michael Gove it says the UK is one of the most centralised countries in the world and more must be done to improve local areas’ ability to raise funding, increase productivity and improve people’s health and wellbeing.

It calls for an end to the current system of competitive bidding for ‘levelling up’ funding and says cash should be allocated instead ‘on the basis of robust evidence of where crucial investment needs to go’.

The claims were made as the LGA held its second annual urban summit, bringing together civic leaders, academics, think tanks and others with an interest in the future of England’s cities.

The signatories to the open letter say cities have ‘a long and proud history of being at the forefront of economic growth and development in our country’.

But it warns that research shows UK’s cities ‘lag behind their global competitors when it comes to productivity and growth’.

It says: ‘To transform cities’ economies, areas need investment, including a sustainable, long-term system for local government finance. Cities have a key role to play in driving economic growth and prosperity.

‘This should be recognised and they should be empowered to fairly keep the proceeds of local growth to reinvest according to local need.’